PAYMENTS AND COMPLETION
9.1 CONTRACT SUM
9.1.1 The Contract Sum is stated in the Owner-Contractor Agreement and, including authorized adjustments thereto, is the total amount payable by the Owner to the Contractor for the performance of the Work under the Contract Documents.
9.2 SCHEDULE OF VALUES
9.2.1 Before the first Application for Payment, the Contractor shall submit to the Project Manager and the Consultant a complete schedule of values allocated to the various portions of the Work, prepared in such form and supported by such data to substantiate its accuracy as the Consultant and/or Project Manager may require. The Contractor shall include project close-out as a separate line item. The total sum of such values shall be the Contract Sum. Each subdivision or classification of the Work shall be identified by letter or code number with particular reference to each individual section of the Specifications, and the Contractor shall append a schedule of the names, referenced as individual, partnership or corporation, of each subcontractor who is to perform all or any portion of each subdivision. This Schedule of Values, when approved by the Owner and the Consultant, shall be used for computing the amounts of the various partial payments and in requisitioning any payment on account. In the event that any subcontractor(s) are not known at the time the Schedule of Values is prepared, an amendment or supplement to the Schedule of Values which shows the names of each additional subcontractor, indicating their subdivision of the Work, shall be furnished to the Project Manager as soon as the information is available.
9.2.2 The Schedule of Values and Application for Payment shall be prepared by the Contractor using Owner’s Form UR 05, University Payment Application Form. The Schedule of Values shall be submitted to the Project Manager and Consultant for review a minimum of thirty (30) days before the first Application for Payment. Profit and general office overhead shall be listed as a separate line item. All Applications and Recommendations for Payment, Change Orders, and other documents involving monetary statements shall have totals carried out to two decimal places.
9.3 APPLICATIONS FOR PAYMENT
9.3.1 At least five (5) days before the date for each progress payment established in the Owner- Contractor Agreement, the Contractor shall submit an original and three (3) copies to the Consultant an itemized Application for Payment in the form required by Article 9.2.2, notarized if required, supported by such data substantiating the Contractor’s right to payment as the Owner and the Consultant may require and reflecting retainage, if any, as provided elsewhere in the Contract Documents. Applications for Payment must include adjustments (adds or deducts) to the Lump Sum of the Contract, resulting from Work performed under approved Change Orders (specified under Article 7) and shall be shown separately on the Application for Payment. The Contractor shall provide a Partial Waiver of Lien warranting that title to all Work and product covered by the Application for Payment will pass to the Owner either by incorporation into the Work or upon receipt of payment by the Contractor, whichever occurs first, free and clear of all liens, claims, security interests or encumbrances, and that no Work or product covered by an Application for Payment will have been acquired by the Contractor or by any other person performing Work at the site or furnishing product for the Project, subject to an agreement under which an interest therein or an encumbrance thereon is retained by the seller or otherwise imposed by the Contractor or such other person.
9.3.2 Unless otherwise provided in the Contract Documents, payments will be made on account of materials or equipment not incorporated in the Work but delivered and suitably stored at the site.
Payments for materials or equipment stored at the site shall be conditioned upon submission by the Contractor of bills of sale, proof of payment or such other evidence satisfactory to the Owner to establish the Owner’s title to such materials or equipment or otherwise protect the Owner’s interest, including applicable insurance and transportation to the site for those materials and equipment stored off-site. If approved in advance by the Owner, payment may similarly be made for materials and equipment suitably stored off-site at a location agreed upon in writing. Payment for materials and equipment stored on or off-site shall be conditioned upon compliance by the Contractor with procedures satisfactory to the Owner to establish the Owner’s title to such materials and equipment or otherwise protect the Owner’s interest, and shall include applicable insurance, storage and transportation to the site for such materials and equipment stored off-site.
9.3.3 The Contractor warrants that title to all Work, materials and equipment covered by an Application for Payment will pass to the Owner either by incorporation in the construction or upon the receipt of payment by the Contractor, whichever occurs first, free and clear of all liens, claims, security interests or encumbrances, hereinafter referred to in this Article 9 as “liens”; and that no Work, materials or equipment covered by an Application for Payment will have been acquired by the Contractor, or by any other person performing Work at the site or furnishing materials and equipment for the Project, subject to an agreement under which an interest therein or an encumbrance thereon is retained by the seller or otherwise imposed by the Contractor or such other person.
9.3.4 The Contractor shall not assign, sublet or transfer any interest in this Agreement or the payments due hereunder without the prior written consent of the Owner. The Contractor shall obtain the written agreement of all Subcontractors and Sub-subcontractors to comply with this provision.
9.4 CERTIFICATES FOR PAYMENT
9.4.1 The Consultant will, within ten days after the receipt of the Contractor’s Application for Payment, either issue a Certificate for Payment to the Project Manager, with a copy to the Contractor, for such amount as the Consultant determines is properly due, less retainage of 10% until the final payment as provided below, or notify the Contractor in writing of the reasons for withholding a Certificate as provided in Subparagraph 9.6.1. This provision shall in no way affect the warranties of the entire Project which shall not commence until Final Completion and a Certificate of Occupancy have been accomplished for each Phase of the Work.
9.4.2 The issuance of a Certificate for Payment by the Consultant will constitute a representation by the Consultant to the Owner, based on his observations at the site and the data comprising the Application for Payment, that the Work has progressed to the point indicated; that, to the best of his knowledge, information and belief, the quality of the Work is in accordance with the Contract Documents (subject to an evaluation of the Work for conformance with the Contract Documents upon completion, to the results of any subsequent tests required by or performed under the Contract Documents, to minor deviations from the Contract Documents correctable prior to completion, and to any specific qualifications stated in such Certificate); and that the Contractor is entitled to payment in the amount certified. However, by issuing a Certificate for Payment, the Consultant shall not thereby be deemed to represent that he has made exhaustive or continuous on-site inspections to check the quality or quantity of the Work, has reviewed the construction means, methods, techniques, sequences or procedures or has made any examination to ascertain how or for what purpose the Contractor has used the monies previously paid on account of the Contract Sum, except that when the Consultant knows the Contractor has not paid his Subcontractors or Sub-subcontractors, the Consultant shall so advise Owner in writing before recommending or issuing a qualified Certificate for Payment.
9.5 PROGRESS PAYMENTS
9.5.1 After the Consultant has issued a Project Certificate for Payment, Owner shall make payment in the manner and within the time provided in the Contract Documents. However, if after issuance of the Certificate for Payment Owner discovers mathematical errors in the Certificate, Owner shall notify the Consultant and the Contractor of the errors and make payments in the correct amount. The Owner shall make payments as follows:
9.5.1.1 Not later than thirty (30) days following receipt, by the Owner, of an acceptable Application for Payment and of a corresponding Certificate of Payment, 90% of the value of each line item based on the Contractor’s prices for labor and product incorporated in the Work and product suitably stored up to the first day of the month in which such Application was submitted, as estimated by the Consultant, less the aggregate of the previous payments.
9.5.1.2 Thirty (30) days after the Consultant issues a final Certificate of Payment following Substantial Completion of the Work, provided the Work then is fully completed and accepted by the Owner and the Contract fully performed, the Owner shall make a final payment of the entire balance due the Contractor. The basis for payment shall be certificates as described in Article 9.
9.5.1.3 All Applications and Recommendations for Payment shall be notarized by a duly authorized Notary Public licensed in the State of New York.
9.5.2 The Contractor shall promptly pay each Subcontractor, upon receipt of payment from the Owner, out of the amount paid to the Contractor on account of such Subcontractor’s Work, the amount to which said Subcontractor is entitled, reflecting the percentage actually retained, if any, from payments to the Contractor on account of such Subcontractor’s Work. The Contractor shall, by an appropriate agreement with each Subcontractor, require each Subcontractor to make payments to his Sub-subcontractors in similar manner.
9.5.3 Either the Consultant or the Project Manager may, on request and at his discretion, furnish to any Subcontractor, if practicable, information regarding the percentages of completion or the amounts applied for by the Contractor and the action taken thereon by the Consultant on account of Work done by such Subcontractor.
9.5.4 Neither the Owner nor the Consultant shall have any obligation to pay or to see to the payment of any moneys to any Subcontractor except as may otherwise be required by law.
9.5.5 No Certificate for a progress payment, nor any progress payment, nor any partial or entire use or occupancy of the Project by the Owner, shall constitute an acceptance of any Work not in accordance with the Contract Documents.
9.6 PAYMENTS WITHHELD
9.6.1 The Consultant, following consultation with the Project Manager, may decline to certify payment and may withhold the Certificate in whole or in part, to the extent reasonably necessary to protect the Owner, if in his opinion he is unable to make representations to the Owner as provided in Subparagraph 9.4.2. If the Consultant is unable to make representations to the Owner as provided in Subparagraph 9.4.2 and to certify payment in the amount of the Application, he will notify the Contractor as provided in Subparagraph 9.4.1. If the Contractor and the Consultant cannot agree on a revised amount, the Consultant will promptly issue a Certificate for Payment for the amount for which he is able to make such representations to the Owner. The Consultant may also decline to certify payment or, because of subsequently discovered evidence or subsequent observations, he may nullify the whole or any part of any Certificate for Payment previously issued, to such extent as may be necessary in his opinion to protect the Owner from loss because of:
9.6.1.1 Defective Work not remedied,
9.6.1.2 Third party claims filed or reasonable evidence indicating probable filing of such claims, 9.6.1.3 Failure of the Contractor to make payments properly to Subcontractors or for labor, materials or equipment,
9.6.1.4 Reasonable doubt that the Work can be completed for the unpaid balance of the Contract Sum,
9.6.1.5 Damage to the Owner or another contractor,
9.6.1.6 Reasonable doubt that the Work will be completed within the Contract Time, 9.6.1.7 Failure to carry out the Work in accordance with the Contract Documents, or 9.6.1.8 Any or all conditions for which payment could be refused under Paragraph 9.4.2.
9.6.2 When the above grounds in Subparagraph 9.6.1 are removed, payment shall be made for amounts withheld because of them.
9.7 FAILURE OF PAYMENT
9.7.1 If the Consultant does not issue a Certificate for Payment through no fault of the Contractor, within ten days after receipt of the Contractor’s Application for Payment, or if the Owner does not pay the Contractor within thirty days after the Owner receives from the Consultant the Certificate for Payment any amount certified by the Consultant, then the Contractor may, upon thirty additional days’ written notice to the Owner and the Consultant, stop the Work until payment of the amount owing has been received. The Contract Sum shall be increased by the amount of the Contractor’s reasonable costs of shut-down, delay and start-up, which shall be effected by appropriate Change Order in accordance with Article 7.
9.8 SUBSTANTIAL COMPLETION
9.8.1 Within one week after the Contractor considers that the Work, or a portion thereof which the Owner agrees to accept separately, is substantially complete as defined in Subparagraph 8.1.3, the Contractor in the presence of the Consultant and the Project Manager, shall walk through the Work and the Consultant shall prepare and submit a comprehensive list of items to be completed or corrected. The failure to include any items on such list does not alter the responsibility of the Contractor to complete all Work in accordance with the Contract Documents. The Contractor shall proceed promptly to complete and correct items on the list. Upon notification by the Contractor that the corrective work is complete, the Consultant will make an inspection to determine whether with Work or designated portion thereof is substantially complete. If the Consultant’s inspection discloses any item, whether or not included on the Contractor’s list, which is not in accordance with the requirements of the Contract Documents, the Contractor shall, before issuance of the Certificate of Substantial Completion, complete or correct such item upon notification by the Consultant. The Contractor shall then submit a request for another inspection by the Consultant to determine Substantial Completion. When the Work or designated portion thereof is substantially complete, and the Consultant, on the basis of an inspection and consultation with the Project Manager, determines that the Work or designated portion thereof is substantially complete, the Consultant will then prepare a Certificate of Substantial Completion of the Work, using Owner’s Form UR 07, which shall establish the Date of Substantial Completion of the Work except as otherwise provided in Subparagraph 8.1.3, shall establish the responsibilities of the Owner and the Contractor for security, maintenance, heat, utilities, damage to the Work, and insurance, and shall fix the time within which the Contractor shall complete the items listed therein. The Certificate of Substantial Completion of the Work shall be submitted to the Owner and the Contractor for their written acceptance of the responsibilities assigned to them in such Certificate. Warranties required by the Contract Documents shall commence on the date of Substantial Completion of the Work or designated portion thereof unless otherwise provided to the Owner and Contractor for their written acceptance of responsibilities assigned to them in such Certificate.
9.8.2 Upon Substantial Completion of the Work for each Phase or designated portion thereof and upon application by the Contractor and certification by the Consultant, the Consultant will promptly issue a final Certificate for Payment stating that to the best of the Consultant’s knowledge, information and belief, and on the basis of the Consultant’s observations and inspections, the Work has been completed in accordance with the terms and conditions of the Contract Documents and that the entire balance found to be due to the Contractor and noted in said final Certificate is due and payable. The Consultant’s final Certificate for Payment will constitute a further representation that conditions listed in Subparagraph 9.9 as precedent to the Contractor’s being entitled to final
payment have been fulfilled. The Owner shall make payment, reflecting adjustment in retainage, if any, for such Work or portion thereof, as provided in the Contract Documents.
9.9 FINAL COMPLETION AND FINAL PAYMENT
9.9.1 Neither the final payment nor the remaining retainage shall become due until the Contractor submit all documents required in 9.9.1.1 and proof satisfactory to Consultant and Owner of the satisfaction of all other requirements in 9.9.1.1. If any Subcontractor or Sub-subcontractor refuses to furnish a release required by the Owner, the Contractor may furnish a bond satisfactory to the Owner to indemnify the Owner against any such lien. If any such lien remains unsatisfied after all payments are made, the Contractor shall refund to the Owner all monies that the latter may be compelled to pay in discharging such lien, including all costs and reasonable attorneys’ fees, together with interest thereon at Owner’s primary cost of borrowing.
9.9.1.1 Final payment shall not be issued until the following have occurred: (1) acceptance of the Work by the Consultant and the Owner as fully performed under the terms of the Contract Documents; (2) labor and materials payment bond requirements under the Contract Documents have been furnished and completed and all accounts for extra Work, product, and allowances for omissions have been rendered, audited, and agreed to and incorporated in such recommendation; (3) Contractor has submitted, and Consultant and owner have approved, Owner’s Form UR 03, Contractor’s Affidavit of Payment of Debts and Claims, and Owner’s Form UR 04, Contractor’s Affidavit of Release of Liens; (4) where applicable, Contractor has obtained from the surety company and submitted to Owner, and Owner and Consultant have approved, Owner’s Form UR 01, Consent of Surety to Final Payment, ; (5) Verification that all warranties and guarantees required by the Contract Documents were delivered before project occupancy; (6) Verification that one paper copy of Maintenance Manuals bound in 3-ring binders and one electronic copy were delivered before project occupancy; (7) Project Record Documents as required.
9.9.2 If, after Substantial Completion of the Work, Final Completion thereof is materially delayed through no fault of the Contractor or by the issuance of Change Orders affecting Final Completion, and the Consultant so confirms, the Owner shall, upon application by the Contractor and certification by the Consultant, and without terminating the Contract, make payment of the balance due for that portion of the Work fully completed and accepted. If the remaining balance for Work not fully completed or corrected is less than the retainage stipulated in